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File image of Chancellor Reeves. Picture by Lauren Hurley / DESNZ.

Falling bond yields are weighing heavily on the pound.

Some Big Downside Moves

The British pound is under renewed selling pressure against the euro, dollar and other major currencies on Wednesday, lead by a fall in UK bond yields.

To be sure, bond yields are falling globally, but they're falling by greater margins in the UK.

This is unambiguously good news for the UK's embattled Chancellor, Rachel Reeves, ahead of the November 26 budget, as it means the cost of government borrowing is coming down.

But for sterling, it implies weakness: bond markets play an overwhelmingly large influence over currency movements.

Two-year Low

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